Entries for Issuing Bonds Thomson Co produces and distribute

Entries for Issuing Bonds Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $900,000 of 10-year, 7% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year May 1. Issued the bonds for cash at their face amount. Nov. 1. Paid the interest on the bonds. Dec. 31. Recorded accrued interest for two months. Journalize the entries to record the above selected transactions for the current year. Bonds Payable May 1 Nov. Y Dec. 31 Check My Work 10 more Check My Work uses remaining. Next

Solution

1-May Cash 900000      Bonds payable 900000 1-Nov Interest expense 31500 =900000*7%/2        Cash 31500 31-Dec Interest expense 10500 =900000*7%/12*2        Interest payable 10500